The Honorable Vincent F. Callahan, Jr.Chairman of House Appropriations Committee
"Mr. Speaker and Members of the House:
It is said that good things happen to those that wait! Well we waited and I believe that the good news we received from the Senate this past Tuesday was well worth the wait.
Ever since we arrived in Richmond last January, our primary obligation to the citizens of the Commonwealth has been the adoption of a new two-year spending plan. However, despite the relatively few, but not insignificant, differences that existed in our respective budget, we were hampered from resolving them because of two underlying issues.
The first was that we would not discuss a budget that contains a tax increase in violation of the state Constitution. For some, our principled stand was considered a “red herringâ€. However, to me and my fellow conferees the Constitution is much bigger than anyone person -- it represents the very fundamental purpose of our legislative existence.
The second issue was the recognition that given the complexity and differing views and solutions to addressing transportation we should set aside the transportation discussion until after we completed the budget.
In a show of good faith, we set the House’s transportation initiative into a new Transportation Program Reserve Fund contained in the Central Appropriations section of the budget. Under the accompanying language in the amendment, these monies would be allocated through separate legislation either during the current special session or a subsequent special session of the General Assembly devoted to transportation.
This past Tuesday, the Senate adopted amendments to House Bill 5002, the 2006-08 biennial budget, which will allow the House conferees to begin the journey of reconciling the difference between the two budgets. The actions taken by the Senate to remove the tax increases from the budget and establishing a reserve fund represent the first step in resolving the differences between the two budgets.
Mr. Speaker I know you join me and my fellow conferees in acknowledging this important action taken by the Senate. By approving a substitute to this legislation that adheres to the Constitution of Virginia and the long-standing practices and customs of the Virginia General Assembly, the Senate has removed a major obstacle to completing our work.
Furthermore, by agreeing to establish a reserve fund the House and Senate have agreed in principle on three major points. First, that transportation should be set aside and discussed upon conclusion of the adoption of a new biennial budget. Second, that we should fulfill our commitment made in 2000 to using insurance premium taxes. Third, that the use of surplus general funds is appropriate for transportation projects.
While the general framework of a reserve fund is in place, we still to negotiate two important aspects of the reserve fund. First, is the appropriate dollar amount to be set aside. In total, the Senate budget proposes approximately $570 million in transportation funds versus the roughly $1.0 billion proposed by the House.
Second, while both budgets include language that stipulate that these funds can only be used upon separate action taken during either the current or a subsequent Special Session; the language proposed by the House does not set either an artificial deadline for action or establish an undefined threshold of revenue that would need to be generated for transportation.
Nonetheless, as is true with any item in conference, the exact dollar amount and accompanying language will reflect a compromise that satisfies the objectives sought by both bodies.
Mr. Speaker, it is my hope that we can begin in earnest to reconcile our budgets. While the number of items in dispute may not be great, there are, however, several significant policy differences that remains within our respective budget. While overcoming these differences should prove much less daunting than our earlier task, they will still require a significant investment of our time.
Mr. Speaker, as is customary, I will ask the House to reject the Senate Substitute to HB 5002 so that both chambers can properly exercise its prerogative to insist upon its amendments. This action will enable the reappointment of the conference committee and return our negotiations to their regular status.
That being said Mr. Speaker in an effort to resolve the various matters in public education last Friday the House conferees made several compromise proposals to the Senate conferees. Specifically, the House conferees have agreed to:
1. Move to the Senate’s position for funding the state portion of a 4% teacher pay raise, which would be effective December 1, 2006. In exchange for our adopting this position, Senate conferees would agree to continue the existing pilot on the Hard-to-Staff School Initiative, a program that is now scheduled for evaluations at the end of this year, and begin the process of phasing out the federal revenue deduction cap.
2. Increase by $20 million the amount of Literary Fund money awarded for local school construction. In exchange for our adopting this position, Senate conferees would accede to the House by agreeing to maintain the current Virginia Retirement System rate at the amount included in the budgets introduced by both Governor’s Warner and Kaine.
Although the House compromises on K-12 education were positively received by our Senate counterparts, they have yet to respond to our offer. Obviously, we are disappointed in the inability of the Senate conferees to reach agreement on these substantive matters. If our proposal had been accepted, about 85-90% of the outstanding issues in K-12 education would have been resolved.
Mr. Speaker and Members of the House your budget conferees remain committed to resolving the various matters in a timely manner. To that end we have proposed to meet with the Senate conferees next Tuesday. Now Mr. Speaker I move that we reject the Senate Substitute to House Bill 5002."